Censored Dependent Variables <Back to Last Page>     <Full Glossary>

Definition of Censored Dependent Variables: A dependent variable in a model is censored if observations of it cannot be seen when it takes on vales in some range. That is, the independent variables are observed for such observations but the dependent variable is not.

A natural example is that if we have data on consumers and prices paid for cars, if a consumer's willingness-to-pay for a car is negative, we will see observations with consumer information but no car price, no matter how low car prices go in the data. Price observations are then censored at zero.

Contrast truncated dependent variables. (Econterms)

Terms related to Censored Dependent Variables:

• Truncated dependent variable

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